Correlation Between Castor Maritime and BlackBerry

Can any of the company-specific risk be diversified away by investing in both Castor Maritime and BlackBerry at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Castor Maritime and BlackBerry into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Castor Maritime and BlackBerry, you can compare the effects of market volatilities on Castor Maritime and BlackBerry and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Castor Maritime with a short position of BlackBerry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castor Maritime and BlackBerry.

Diversification Opportunities for Castor Maritime and BlackBerry

-0.01

Correlation Coefficient

Castor Maritime  BlackBerry

Good diversification

The 3 months correlation between Castor and BlackBerry is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Castor Maritime and BlackBerry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackBerry and Castor Maritime is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Castor Maritime are associated (or correlated) with BlackBerry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackBerry has no effect on the direction of Castor Maritime i.e., Castor Maritime and BlackBerry go up and down completely randomly.

Pair Corralation between Castor Maritime and BlackBerry

Given the investment horizon of 90 days Castor Maritime is expected to under-perform the BlackBerry. But the stock apears to be less risky and, when comparing its historical volatility, Castor Maritime is 1.28 times less risky than BlackBerry. The stock trades about -0.19 of its potential returns per unit of risk. The BlackBerry is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  235.00  in BlackBerry on August 30, 2024 and sell it today you would earn a total of  26.00  from holding BlackBerry or generate 11.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Castor Maritime  vs.  BlackBerry

Castor Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castor Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

BlackBerry

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BlackBerry are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, BlackBerry sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Castor Maritime and BlackBerry

The main advantage of trading using opposite Castor Maritime and BlackBerry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castor Maritime position performs unexpectedly, BlackBerry can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BlackBerry will offset losses from the drop in BlackBerry's long position.

The idea behind Castor Maritime and BlackBerry pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.